Third party reinsurance

In the normal course of business, Sirius Group seeks to protect its businesses from losses due to concentration of risk and losses arising from catastrophic events by reinsuring with third-party reinsurers. Sirius Group remains liable for risks reinsured in the event that the reinsurer does not honor its obligations under reinsurance contracts. The effects of reinsurance on Sirius Group's written and earned premiums and on losses and LAE were as follows:



(Millions)	2019			2018			2017
Written premiums:
Direct	$	511.2		$	454.5		$	450.2
Assumed	1,391.5			1,366.5			989.1
Gross written premiums	1,902.7			1,821.0			1,439.3
Ceded	(400.1		)	(463.9		)	(349.1		)
Net written premiums	$	1,502.6		$	1,357.1		$	1,090.2
Earned premiums:
Direct	$	481.0		$	432.6		$	405.7
Assumed	1,357.7			1,236.2			942.2
Gross earned premiums	1,838.7			1,668.8			1,347.9
Ceded	(397.1		)	(406.5		)	(312.6		)
Net earned premiums	$	1,441.6		$	1,262.3		$	1,035.3
Losses and LAE:
Direct	$	316.3		$	260.5		$	294.9
Assumed	1,111.4			819.1			701.3
Gross losses and LAE	1,427.7			1,079.6			996.2
Ceded	(257.4		)	(179.6		)	(185.0		)
Net losses and LAE	$	1,170.3		$	900.0		$	811.2

Sirius Group's reinsurance protection primarily consists of pro-rata and excess of loss protections that protect all of its reportable segments. Attachment points and coverage limits vary by region around the world. Protections by reportable segment are listed below.

Global Reinsurance

Sirius Group's core proportional property reinsurance programs provide protection for parts of the non-proportional treaty accounts written in Europe, the Americas, Caribbean, Asia, the Middle East, and Australia. These reinsurance protections are designed to increase underwriting capacity where appropriate, and to reduce exposure both to large catastrophe losses and to a frequency of smaller loss events.

Sirius Group has in place excess of loss retrocessional coverage for its worldwide earthquake related exposures. This coverage was renewed for one year at June 1, 2019, providing 50% of $40.0 million of reinsurance protection in excess of Sirius Group's retention of $35.0 million and a further of 100% of $35.0 million of coverage in excess of $75.0 million.

Sirius Group periodically purchases industry loss warranties ("ILW") contracts to augment its overall retrocessional program. The following ILW contracts are currently in force:



Scope	Limit			Trigger			Expiration Date
United States excluding North East, all natural perils		$5.0	million		$40.0	billion	July 5, 2020

Sirius Group also purchases excess of loss reinsurance protection for its facultative and primary insurance property books. Almost all of Sirius Group's excess of loss reinsurance protections, excluding ILWs which tend to only cover one loss event, include provisions that reinstate coverage at a cost of 100% or more of the original reinsurance premium.

The aviation & space reinsurance program is intended to reduce exposure to a frequency of small losses, a single large loss, or a combination of both. For the proportional and facultative aviation book, reinsurance protection purchased is geared to cover losses from events that cause a market loss in excess of $150.0 million up to a full policy limit of $2.0 billion. This program is in place through October 2020. For the non‑proportional book, reinsurance protection includes a 12.5% quota share treaty. In addition, the non‑proportional book is protected by ILWs totaling limits of $27.5 million. The ILWs attach at industry loss levels between $400.0 million and $800.0 million.

Other lines of business within the Global Reinsurance segment are protected through various quota share and excess of loss protections.

Global A&H

Sirius Group has excess of loss protection covering its personal accident and life accounts written in the Stockholm, Hamburg, Liege, and Singapore branches. For primary insurance, there are account‑specific quota share and stop‑loss reinsurance protections in place of various percentages for the medical benefits and student health business. In addition to these primary insurance protections, there is an excess of loss protection of unlimited dollars in excess of $1.5 million (per person) is in place.

U.S. Specialty

The Workers' Compensation, Environmental, and Surety lines of business within the U.S. Specialty segment are protected through various quota share and excess of loss protections.

Runoff & Other

Within the Runoff & Other segment, there are multiple reinsurance protections in place, primarily excess of loss protections.

Reinsurance recoverables by rating

At December 31, 2019, Sirius Group had reinsurance recoverables on paid losses of $73.9 million and reinsurance recoverables of $410.3 million on unpaid losses. At December 31, 2018, Sirius Group had reinsurance recoverables on paid losses of $55.0 million and reinsurance recoverables of $350.2 million on unpaid losses. Because retrocessional reinsurance contracts do not relieve Sirius Group of its obligation to its insureds, the collectability of balances due from Sirius Group's reinsurers is important to its financial strength. Sirius Group monitors the financial strength and ratings of retrocessionaires on an ongoing basis. Uncollectible amounts historically have not been significant.

The following tables provide a listing of Sirius Group's gross and net recoverable amounts by the reinsurer's Standard & Poor's Financial Services LLC ("Standard & Poor's") rating and the percentage of total recoverables as of December 31, 2019 and 2018. With certain reinsurers if Standard & Poor's rating was not available, an A.M. Best rating was used.



	December 31, 2019
Rating⁽¹⁾	Gross		Collateral		Net		% of Net Total
AAA	$	3.4	$	—	$	3.4	1	%
AA	117.2		14.3		102.9		42	%
A	301.8		195.6		106.2		43	%
BBB or lower	14.9		13.7		1.2		1	%
Not rated	46.9		13.4		33.5		13	%
Total	$	484.2	$	237.0	$	247.2	100	%

⁽¹⁾Standard & Poor's ratings as detailed above are: "AAA" (Extremely Strong), "AA" (Very strong), "A" (Strong), and "BBB" (Adequate).



	December 31, 2018
Rating⁽¹⁾	Gross		Collateral		Net		% of Net Total
AA	$	115.1	$	1.5	$	113.6	35	%
A	212.9		45.4		167.5		52	%
BBB or lower	19.5		13.3		6.2		2	%
Not rated	57.7		23.2		34.5		11	%
Total	$	405.2	$	83.4	$	321.8	100	%

⁽¹⁾Standard & Poor's ratings as detailed above are: "AA" (Very strong), "A" (Strong), and "BBB" (Adequate).

The following tables provide a listing of the five highest gross recoverable amounts by reinsurer, along with percentage of total recoverable amount, the reinsurer's Standard & Poor's reinsurer rating, and the percentage that the recoverable is collateralized as of December 31, 2019 and 2018:



	December 31, 2019
(Millions)	Balance		% of Total		S&P rating	% Collateralized
Reinsurer:
General Insurance Corporation of India⁽¹⁾	$	143.0	30	%	A-	98	%
Swiss Reinsurance Companyﾠ Ltd.	44.7		9	%	AA-	5	%
Berkshire Hathaway,ﾠInc.	34.0		7	%	AA+	3	%
Lloyd's of London	27.0		6	%	A+	30	%
Argo Capital Group Ltd.	19.1		4	%	A-	89	%

⁽¹⁾Reflects an A.M. Best rating of "A-" (Excellent).



	December 31, 2018
(Millions)	Balance		% of Total		S&P rating	% Collateralized
Reinsurer:
General Insurance Corporation of India⁽¹⁾	$	82.7	20	%	A-	97	%
Swiss Reinsurance Company Ltd.	44.1		11	%	AA-	—	%
Berkshire Hathaway, Inc.	39.3		10	%	AA+	1	%
Argo Capital Group Ltd.	16.7		4	%	A-	87	%
Lloyd's of London	13.4		3	%	A+	5	%

⁽¹⁾Reflects an A.M. Best rating of "A-" (Excellent).